Service tax applicability

The main question is whether the activity of a company which is mainly in the activity of exporting drawings made through computer comes under service to the foreign client, or whether it is sale of a product (drawings).

Company produce mainly computer generated drawings from earlier produced hand made drawings. It also

still produce a small number of drawings made by hand. (inkpen drawings)

a)      In case  it is a Sale and the full production is exported : Is there any sales taxe or VAT applicable ?

b)     In case it is a Service and the full production is exported : Is it correct that the Place of Provision according to Service rules is abroad as the sole customer is located in Europe

Replies (1)

Goods is exported then no need to pay sale tax/vat. If you provide the drawing services from computer through online then you need to pay service tax under place of provision of service tax rules 2012. If you provide these services in physical form then no need to pay service tax. 

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